Renewables can recharge Taiwan

By Alex Tong 童遷祥 /

Mon, May 28, 2012 - Page 8

The policy to increase fuel and electricity prices has prompted a wave of public complaints directed at CPC Corp, Taiwan and Taiwan Power Co, as well as leading to a series of domestic commodity price fluctuations. However, amid the controversy, the fact that Taiwan is not energy self-sufficient and that it needs to save energy has been ignored. Compared with the first energy crisis in 1973, Taiwan now has many more tools at its disposal when seeking to alleviate the threat of energy shortages and to lower its dependence on energy imports. It is, above all, a matter of determination.

Using renewable energy along with saving energy is a two-pronged strategy to solve the energy crisis by combining the development of new energy sources with energy cutbacks. This may sound like more of the same old thing, but since the first energy crisis in the 1970s, solar energy and wind power have matured and now have high application value.

It is still a very common belief that renewable energy is prohibitively expensive and therefore can only be used to meet small-scale needs. Compared with big-hitting mature energy sources such as oil, coal and nuclear power, this view currently makes sense. However, oil will one day dry up; coal poses a serious carbon emissions problem and nuclear energy — as a proportion of our energy mix — will have to be diminished given the direction that public opinion has taken since last year’s nuclear disaster in Japan.

With every ‘traditional’ energy source facing new challenges, it is time we started to give serious consideration to renewable energies.

Solar power is no longer the expensive source of energy that it once was. Ten years ago, the cost of one kWh of solar energy was NT$15 to NT$20, but that has now dropped to about NT$7. As the technology continues to develop and markets expand, it is very possible that this cost will drop by another 50 percent and maybe even more over the next decade. By that time, solar power will be able to compete with “traditional” energy sources on equal terms.

Another issue that is frequently brought up when discussing the development of renewable energy sources concerns the land needed for the construction of renewable energy farms. On the flip side, solar and wind power are both clean sources of energy and as long as there is ample communication and accurate environmental impact assessments, the construction of such energy farms tapping into these renewable sources is unlikely to meet much public opposition.

Currently, about 20,000 hectares of Taiwan’s land is considered unfit for agricultural use, either because of pollution or because of salinization through coastal land subsidence. This land could potentially be used to host either solar power or wind power plants. If proper plans could be made for obtaining the land alongside adequate compensation schemes, converting land into an energy resource would no longer simply be a dream.

Late last year, the Bureau of Energy, under the Ministry of Economic Affairs, drew up a plan to develop 1 million roof-top solar panels and 1,000 sea and land-based wind power turbines. The bureau’s proposal has forecast that by 2030, renewable energy power generation could reach 12,500MW and account for more than 16 percent of Taiwan’s installed capacity. It would generate about 35.6 billion kWh per year, the approximate amount of energy used by 8.9 million households.

Coupling the capabilities of domestic research organizations with the renewable energy equipment industry, it seems that it would not be that difficult to meet these goals. It is on this foundation that the government has planned a policy to maximize renewable energy. If that can be combined with energy saving through the provision of appropriate incentives to different groups, we would be able to reduce our energy dependence at an even faster pace, which would help reduce the impact of fuel and electricity price increases.

In terms of energy savings, Minister of Economic Affairs Shih Yen-shiang (施顏祥) announced last month that the government would make NT$100 billion (US$3.37 billion) in loans available for companies wishing to invest in energy-saving equipment. I would further propose the establishment of a green energy credit guarantee fund that would underwrite bank loans to businesses or individuals who have elected to install energy saving equipment or are seeking energy saving services. That would mean that banks would provide the capital, while the guarantee fund would carry all the risk. Since the banks carry no risk whatsoever, the government would be able to negotiate significantly lower interest rate loans. There are currently such funds in operation in other countries that could serve as a reference for the practical operation and management of such a fund.

Following the announcement of the fuel and energy price hike, the ministry has rolled out two plans for subsidizing the purchase of energy saving household appliances and that has had some effect on stimulating eco-oriented purchases. The establishment of a green energy credit guarantee fund would offer a business model that would more systematically encourage energy saving measures on an even larger scale and it would also demonstrate to the public that the government is determined to actively promote energy saving.

An international comparison shows that renewable energy makes up 11 percent of power generation in the US, 20 percent in Germany, 26 percent in China and more than 30 percent in Spain and Denmark. All these countries have a higher energy self-sufficiency than Taiwan, but they also started to promote renewable energy a long time ago. There is no reason why Taiwan, which is relying on energy imports to match 99 percent of its energy consumption need, should not hurry to catch up with these countries by developing renewable energy and improving its current situation.

Alex Tong is vice president of the Industrial Technology Research Institute, which is in charge of the Green Energy and Environment Research Laboratory.